It was a Friday and Saturday of tax stories last week.
On Friday we were all supposedly going to have our bank accounts raided by HMRC, which is utter nonsense. 17,000 might a year, after maybe nine contacts with HMRC with whom, despite that, they are refusing to cooperate. Now I happen to think an ombudsperson is an essential control in this process, with that ombudsperson being empowered to take quick decisions to prevent sequestration when there is a genuine tax dispute going on for which a settlement precedent (such as an identical case being settled at tribunal) has not been created. That apart, this issue is a storm in a teacup. People refusing to pay their tax is not a victimless crime: we all have to pay if others don't and there is no doubt many refuse to do so, and that imposes considerable cost (including legal fees) on society.
As for the related fuss about money being taken from joint bank accounts, as I said on air many times on Friday the answer to anyone with concern on this issue is that if you know your partner has dodgy tax affairs don't share a bank account with them. For heaven's sake, either shop them as you should or at the very least (and if in doubt) act like a grown up in your own best interest and separate you cash. This is another non-event of an issue, in other words.
So let's move on to Take That having to pay millions in tax that they always owed. That is not a non-event. That was another welcome decision, like the Chris Moyles case, where a judge empowered by the new environment in tax (informed no doubt by the General Anti-Abuse Rule, inadequate as it is) has stood back and deemed a tax avoidance scheme non-commercial and that it therefore fails, not because of its legal construction but because the trade it supposedly supports simply does not exist. This common sense ruling, which a proper general anti-avoidance provision would have always prevented, is very welcome indeed. But what was absurd was that the press reported it as if members of Take That now had a tax bill of millions. That's not true: they always had that bill and now they have to pay it, and that's very good news for us all. The return of an OBE might constitute an apology, of sorts.
For once HMRC almost had a good week. Such a shame then that on Saturday a whistleblower pointed out in the Times that the organisation is rapidly falling apart due to understaffing. It did nit take long for reality to hit home again, pretty hard.
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I think you’ve reached the nub of the issue with regards to HMRC having the power to take monies from a bank account – the lack of judicial oversight. An ombudsman would be a sensible element and at least provide some oversight and may help prevent errors.
I think you’re a little harsh about the joint account issue. The other party (probably a spouse or significant other) may not be financially sophisticated and have no idea about the partner’s tax affairs, especially if they’re a non-working spouse or civil partner.
Would you agree that a first step in the process would be some sort of order compelling an individual to list all their bank accounts on which they’re a signatory and in what capacity? Aside from reducing the chance HMRC seize funds from the wrong account, it might concentrate the mind of the non-payer.
Requiring such a list is a normal first step in a tax investigation
I was thinking more in those cases where the tax is not in dispute but the non payer is just being damn awkward…
“For once HMRC almost had a good week. Such a shame then that on Saturday a whistleblower pointed out in the Times that the organisation is rapidly falling apart due to understaffing. It did nit take long for reality to hit home again, pretty hard.”
Yes, well, the unions within HMRC have been pointing this out for a long time, but of course, to the ideological zealots in this government, unions, especially (shock horror!) public sector ones like PCS are the enemy, to be either ignored, undermined in a variety of underhand ways, or be treated with contempt.
Still, nice to see some good news on the tax avoidance front. As you say Richard, this tax bill hasn’t arisen, it was always due, but Barlow and his pals tried to avoid paying it. Now of course, they need to pay the tax plus interest, which I’m guessing is substantial.
“Now I happen to think an ombudsperson is an essential control in this process, with that ombudsperson being empowered to take quick decisions to prevent sequestration when there is a genuine tax dispute going on for which a settlement precedent (such as an identical case being settled at tribunal) has not been created”
We could call that person a “judge” perhaps?
If you like
Yep, and he could sit in a “court” where “evidence” and “due process” could take place. Kind of like it does now.
I’m sure you’ve seen cases where HMRC continues to send threatening letters even when another stream is in resolution so I wouldn’t be too confident of lots of warnings from HMRC triggering any form of safety net.
Lin Homer CEO of HRMC recently sent a communication to all staff saying that the cuts to staff and offices are both “inevitable and right”and attempting to dissuade staff from taking strike action over office closures and staff cuts It seems that she has strayed onto dangerous ground by making this statement which is what you would expect from a politician- but not from an (allegedly) impartial civil servant.Quite how service to the public will improve by closing public enquiry offices and having less staff is a mystery.
Can’t disagree with a word you say. Some people can pay, won’t pay.
What I would really like to see is the firms who set up these schemes
hammered.
And I would like it explained to me that if there was no commercial justification for the schemes why have not the firms selling them not commited fraud? (on the public purse).